In this paper we present an evaluation of forecasts of a vector of variables of the German economy made by different institutions. Our method permits one to evaluate the forecasts for each year and then if one is interested to combine the years.
Using structural models to estimate and forecast quarterly GDP conditional on a large
number of economic indicators raises parsimony problems, such as the need to define many
identification restrictions and also to deal with very sparse asymptotic distributions of the
coefficients. Factor models have the role to fill this gap in macroeconomic modelling. The